The Cantillon Blog

In a serie of blog post, Guy Kawasaki gives template documents for financial forecast, business model and pitching.

To start with, the financial document reconcile vision and details. On one hand the document support the vision with a non detailed 5 years forecasts. The goal is to check the basic assumptions behind the model. On the other hand, one sheet is dedicated to the next year forecasts in much more details.

In my opinion, this last document, unless you want to raise, can be replaced by more agile methods.

The book running lean for instance propose a methodology to iterate very quickly between business model hypothesis for web based ventures.
http://www.amazon.com/Running-Lean-Iterate-Series-ebook/dp/B006UKFFE0

Bill Gross is the founder and CEO of Idealab, a technology incubator headquartered in Pasadena, California. Bill has created over 75 companies since 1996. He shares willingly his experience about creating and running successful organizations. I've collected some of his ideas mainly from 2 speeches at Le web (video in the post) and at Stanford.
Focus always win — (as long as you choose the right focus). Do one thing extremely well to connect better with the customer.

Take risk — risk taking should be encouraged. Idealab favor this as the startup founding teams can go back to the incubator, which acts as a safety net in case of failure.

Mar­ket Power Rules — Try to find a rapidly grow­ing mar­ket, it’s like run­ning a race with a strong wind at your back. He illustrates that approach through a brilliant presentation of one of his projects: esolar (listen to the Stanford Podcast). If you have something new or ahead of competition it's too early by definition. In that case, survive until the market is ready. Don't spend money too fast only to get market shares.

Follow your passions — you have to be in love with what you are doing — Every business will face huge chal­lenges that you will only over­come if you have deep pas­sion for the idea.

Give equity to unlock human potential — Even the receptionist should have a share.

Management teams — Get complementary/opposite skills in your start-up. This is the most important thing to have with a decent idea. Bill Gross learned this lesson through his personal experience. Successful companies among the 300 rounds of financing had balanced team skills. Those which were not successful didn't.

Hereafter is one personality taxonomy among many others: producer, entrepreneur, administrator, integrator. Everybody is dominant in one category and has weaknesses in the others.

Producer makes things happens, sales to the consumer, all the execution stages to put a product in the hands of the customer.

Integrator, the person who is more the "people person". He gives balance to the company. He avoids that people will be at war with each other. He has more interest in what people are thinking than in execution.

Administrator. He is a bureaucrat. He puts systems in place. Pays the employees... Sometime the P hates the A because he wants to get things done and the A want to put a system in place.

Instagram is a free photo sharing iPhone application. It has grown very quickly in 2010 to more than 10 million users.
In a presentation at Stanford, Instagram cofounders go through several myth according to them people believe in before creating their startup for real. Here is a selection:

How to start a company is not explained in a written manual, nor written in a blog :) You have to deal with uncertainty and make snap decisions. This leads you to develop better guts.

They insist on the need to be drawn in and passionate. The fact that you don't want a boss is not a good reason to become entrepreneur.

Don't think about scaling at start.

The hard thing is to find the problem to solve, not to find solutions to problems. They advise to list the major problems you want to solve, then verify this are the problems people are having by putting the product early in front of them. Even if the problem seems simple, simple problems are hard to solve at scale.

Corollary, don't start a stealth startup. You need to put the product in front of people and explain it. The ideal is to build a minimum viable product, as advocated in Ries' book: "the lean startup". You have to find the cheapest way to validate your hypothesis. Failing early and often is good.

How to deal with competition? They advise to focus on making the product you love and not over- thinking about competition.

Check that co-founders have the same time horizon (cashing out after 6 month vs staying for the long run).